Cotton futures edged higher on Thursday to a six-week high, supported by a weaker dollar and strong exports sales data, but gains were capped as traders cashed in on this week's rally. The second month December contract on ICE Futures was on track for the highest weekly percentage gain in more than two months, up about 6.5 percent so far this week.
On Tuesday, the contract broke above 70 cents for the first time in more than a month. "This was the fourth straight session of higher prices, so there was a little bit of consolidation, a little bit of profit taking by the new longs, almost a bit of indecision as to where the next phase is," said Jim Lambert, director of sales at Capstone Merchant Services.
ICE cotton has been mirroring the strength in the Chinese cotton market over the past week and any fall over there in the upcoming sessions would reflect on the US markets, Lambert noted. The market also factored in a weekly export sales report from the US Department of Agriculture (USDA), which showed net upland sales totalled 197,900 running bales for the week ended Sept. 15, up 45 percent from the prior week.
The December cotton contract on ICE Futures US settled up 0.09 cent, or 0.13 percent, at 71.71 cents per lb. It traded within a range of 71.2 and 72.36 cents a lb, a peak since Aug. 12. China cotton futures on the Zhengzhou Commodity Exchange were up 0.14 percent to 14,775 yuan per tonne.
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